Airline tie-up moves pave new way for post-pandemic partnerships | Analysis

Air France-KLM’s long-term partnership with French shipping and logistics specialist CMA CGM unveiled on Wednesday is further evidence of the variety of partnership approaches emerging in the pandemic recovery phase.

In this case, a new 10-year deal aims to drive growth in the revitalized air cargo market. The two companies have already shown ambitions for growth in this sector by signing for the new Airbus A350 freighter, and operationally this should prove useful as the partners will jointly develop air cargo operations in the years to come.

Significantly for Air France-KLM, which required public capital injections to overcome the crisis, it will also bring in a new investor. CMA CGM – which just over a year ago launched a dedicated air transport operation in response to increased demand for air freight – is consolidating its presence in the sector by agreeing to take up to 9% of the capital of the group.

In a way, this echoes Lufthansa in its initial moves for Italian start-up ITA Airways. In January, carrier group Star Alliance teamed up with Swiss shipping company MSC Group to show interest in ITA.

Fresher thinking was evident in South America, as Avianca – the first of the major Latin carriers to emerge from Chapter 11 bankruptcy protection – developed a holding company structure to benefit from greater large scale. Avianca and Brazilian operator Gol will merge into a single holding company, while retaining their own individual brands. The holding company, ABRA Group, will be based in the UK.

The companies say the transaction, which is expected to close in the second half of 2022, will allow them to be more competitive in the long-haul and cargo markets. The group is also expected to encompass Viva Group’s operations in Colombia and Peru, with Avianca disclosing a similar deal last month to co-own it with Viva.

More traditional consolidation continues to play out in the United States, where JetBlue has not given up the fight for ultra-low-cost carrier Spirit Airlines. The latter’s board snubbed JetBlue’s competing bid, citing concerns about the likelihood of it winning regulatory approval for a suit, opting to stick with JetBlue’s lowest bid. Frontier Airlines. JetBlue is now issuing a hostile bid, directly calling on Spirit shareholders to reject Frontier’s offer ahead of the June 10 vote.